Final answer:
Kyle is distressed because he received a bad report card, which he tries to hide by placing it in a soup can within the trash.
Step-by-step explanation:
Based on the provided passage, we can infer that Kyle is distraught because he received a bad report card. The clues to this conclusion include his actions of balling up the report card and hiding it inside a soup can in the trash, further concealed by flipping the can and covering it with other pieces of garbage. These actions suggest an attempt to hide the report card from his parents, likely due to disappointment or fear of their reaction to poor grades. Additionally, Kyle's behavior of immediately picking up his game controller after attempting to hide his report card further indicates his inclination to distract himself from the distressing situation.